Payroll tax deposits

The return is quarterly; the money isn't. Federal income tax withheld and both halves of FICA are deposited on a schedule of their own, and the schedule depends on how much tax the employer reported in the past — not on how often it pays people. Northwind owes $2,335.20 on September's payroll: $1,050 of income tax, $642.60 of employee FICA and $642.60 of its own.

Each year's schedule comes from the lookback periodPayrollLookback periodThe four quarters — July 1 two years back to June 30 last year — whose Form 941 tax decides a year's deposit schedule: $50,000 or less, monthly; more, semiweekly. A new employer's lookback quarters count as zero: the four quarters from July 1 two years back to June 30 of last year. $50,000 or less of Form 941 tax in them makes the employer a monthly schedule depositorPayrollMonthly schedule depositorAn employer whose lookback-period tax was $50,000 or less, and every employer in its first year: the federal income tax withheld and both halves of FICA on a month's paydays are deposited by the 15th of the next month; more makes it a semiweeklyPayrollSemiweekly schedule depositorAn employer whose lookback-period tax was over $50,000: taxes on Wednesday-to-Friday paydays are deposited by the next Wednesday, Saturday-to-Tuesday paydays by the next Friday. Reports its liability by payday on Schedule B (Form 941) one. A new employer's lookback quarters count as zero, so Northwind is monthly for 2026: the tax on a month's paydays is due by the 15th of the next month. September's $2,335.20 is due Thursday, October 15, 2026.

The next-day deposit rulePayrollNext-day deposit rule$100,000 or more of employment tax accumulated on any day is due the next business day, on either schedule — and turns a monthly depositor semiweekly for the rest of the year and the next catches the startup with a big one-off payroll. If $100,000 or more of tax accumulates on any single day — a round of bonuses, a large option exercise run through payroll — it's due the next business day, and a monthly depositor becomes semiweekly for the rest of that year and the next.

Every federal deposit is electronic: through EFTPSPayrollEFTPSThe Treasury's free system for federal tax deposits. Every federal payroll deposit must be made electronically — through EFTPS, IRS Direct Pay or the IRS business tax account — and an employer whose provider deposits for it can check each one in EFTPS, IRS Direct Pay or the IRS business tax account, or by a provider doing it in the employer's name. A new employer that asked for an EIN with a federal tax obligation is pre-enrolled in EFTPS, and the PIN arrives by mail.

In this lesson: the semiweekly schedule worked through Publication 15's own examples, holidays included.